Huge budget shortfall for NHS

NHS managers have warned that the health service is facing its most sustained financial shortfall in its history.

The NHS confederation says in a report that the funding shortage will be so severe that the NHS in England will not survive unchanged.

The body also fears the prospect of staff cuts and that any cash increases will be swallowed up in rising costs and that in real terms the NHS in England could face real term reductions of up to £10bn in the three years after 2011.

New treatments and the challenges of an ageing population are key factors that could result in measures such as a budget cap on new drugs.

The head of policy at the NHS Confederation, Nigel Edwards, said: "We are really going to have to think very deeply and carefully about everything we do and subject it to very rigorous scrutiny - and enlist all of our doctors, our front line clinical staff in rethinking the way we do things.

"This is a situation affecting health systems all across Europe as governments experience a mismatch of income tax and expenditure budgets."

The confederation also indicates that the NHS in Scotland, Wales and Northern Ireland will not escape unscathed.

Health Secretary Andy Burnham admitted that the health service would face a "challenge" over the next five to 10 years but said the suggestion of closures or job cuts was "premature".

Mr Burnham said that he believed the NHS was well-placed to deal with the tough economic times ahead.